ROME, May 23  Italy's Justice
Minister, Adolfo Sarti, resigned today following reports linking
him to a powerful, secret Masonic lodge that has been implicated
in a variety of criminal activities.
The growing scandal surrounding the lodge
has shaken the coalition Government of Prime Minister Arnaldo
Forlani and has dwarfed all other scandals that Italy has endured
in the last 30 years.
The scandal, which had been simmering
for months, broke open Thursday when Mr. Forlani, on the advice
of investigating magistrates in Milan, made public a list of
953 names of reported members of the lodge, called Propaganda
Due, or P-2. The list included Cabinet ministers, members of
Parliament, judges, army and police generals, bankers, journalists
and other figures in the Italian Establishment.
Mr. Sarti, a Christian Democrat, denied
having been a member of the lodge, but documents found in the
offices and country villa of Licio Gelli, the lodge's grandmaster,
reportedly show that he applied for membership.
Yesterday Mr. Gelli, who is in hiding,
apparently abroad, was indicted in absentia on charges of spying
for Argentina. He is understood to hold Argentine as well as
Italian nationality.
Col. Antonio Viezzer, a member of the
lodge and former head of SID, a now dissolved government intelligence
organization, was arrested yesterday on the same charges placed
against Mr. Gelli.
The Forlani Government and the major
political parties have not yet decided what sanctions, if any,
they will take against military and civilian officials belonging
to the lodge, whose members, according to the police, had sworn
ultimate allegiance to their grandmaster rather than to the nation.
In a report to the Government, the Milan
magistrates wrote that "Gelli had constructed a very real
state within the state," using blackmail, favors, promises
of advancement and bribes.
"Lodge P-2 is a secret sect that
has combined business and politics with the intention of destroying
the constitutional order of the country and of transforming the
parliamentary system into a presidential system," the magistrates
said.
"Gelli's strategy has been to bring
under his control a large number of powerful and highly placed
persons and thus to break down, for the first time in Italian
history, the separation between political, administrative, military
and economic spheres," they said.

Powerful Banker Arrested

One of Italy's most powerful bankers,
Roberto Calvi, a member of the lodge and longtime friend of Mr.
Gelli, was arrested Wednesday on charges of having used his banks
for illegally exporting huge sums of money and of having been
involved, with Mr. Gelli, in the fake kidnapping of Michele Sindona,
the bankrupt financier who sought to avoid trial in New York
by fleeing to Europe.
Mr. Calvi is president of Banco Ambrosiano
and of La Centrale Finanziaria, a financial institution. Six
members of the board of La Centrale were arrested at the same
time, among them Carlo Bonomi, the head of the Invest Financial
Company, one of the four largest groups of its kind in the country.
The arrest of Mr. Calvi and his associates
"decapitated" the financial Establishment of Milan,
a journalist said. Mr. Calvi's La Centrale had recently bought
more than 40 percent of the Rizzoli publishing group, which owns
Corriere della Sera, a leading newspaper.

Corriere Editor Denies Report

The name of Franco Di Bella, editor
in chief of Corriere, was on the list of reported members of
the lodge. Mr. Di Bella, in a meeting with the paper's news staff,
denied that he was a member but said Mr. Gelli, the lodge grandmaster,
had approached him on several occasions and had once asked him
to dismiss one of the paper's leading writers. Mr. Di Bella said
he had rejected the suggestion.
Mr. Calvi's involvement in the Sindona
affair and in allegedly illegal money transfers came to light
in documents seized by the police in Mr. Gelli's house in Arezzo,
Tuscany, last March, according to police reports.
This in turn led to the resignation of
Ugo Zilletti as acting head of the Supreme Council of Magistrates,
which is responsible for appointments, promotions and transfers
of judges, prosecutors and other legal officers. Mr. Zilletti
resigned in the wake of allegations that he improperly helped
Mr. Calvi get back his passport after it had been confiscated
by the investigating magistrates.

Jailed General on List

Among the generals whose name appeared
on the list of reported members of the lodge is Raffaele Giudice,
the former commander of the Finance Guard the paramilitary force
specializing in border control and antismuggling operations General
Giudice is in jail in connection with a huge petroleum tax scandal
that came to light last fall, when it was discovered that more
than $2 billion from Italian tax revenues had been diverted into
private pockets and spirited abroad.
Also on the list are about 20 officers
of the Carabinieri, the prestigious paramilitary police corps.
Gen. Carlo Alberto Dalla Chiesa, one of the ranking Carabinieri
officers, was listed as a candidate for membership who had not
been admitted. He has been quoted as telling investigators that
he applied for membership in the hope of finding out if any of
his men were in the lodge.
Gen. Giovanni Grassini, the chief of
SISDE, the secret intelligence and security service of the Interior
Ministry, and Gen. Giuseppe Santovito, the head of SISME, the
security unit of the Defense Ministry, were also on the list.
Labor Minister Franco Foschi, a Christian
Democrat, and Foreign Trade Minister Enrico Manca were listed
as members but have denied that they had joined.

50 Deny Being Members

More than 50 others  including
Pietro Longo, the Secretary of the Social Democratic Party, several
journalists and members of Parliament  denied being members
of the lodge, although their names were on Mr. Gelli's lists.
Mr. Gelli, an industrialist, joined a
Masonic lodge in 1963 in Frosinone south of Rome and a short
time later organized Lodge P-2, apparently as an elite organization
intended to reach much deeper into the Italian Establishment
than any of the other lodges.
Italy has about 550 Masonic lodges. Membership
is estimated at 15,000, including many Roman Catholics. But Flaminio
Piccoli, the Secretary of the church-connected Christian Democratic
Party, said a few days ago that membership in a Masonic lodge
was incompatible with being a Christian Democrat because "the
Masons are a force that attacks the church."